Cookies are everywhere. And not just because you’re a baker.
They’re the bread and butter of graduation parties, company gatherings, last minute house-warming gifts, and everything in between. But for special occasions, or special customers, they are after something more than the clear box with the supermarket price sticker hastily scraped off. That’s where you come in. But how do you price cookies when your only comparison is the supermarket?
Before diving in, let’s remember one thing: when your customers are looking for cookies, whether it’s a dozen homemade chocolate chip cookies or hundreds of custom, hand-decorated, designed sugar cookies, they’re probably shopping around. You’re not the only person they’re reaching out to in most cases. And you need to know your true competition — other home bakers — on top of grocery store and brick-and-mortar bakery pricing.
Look at your closest competitors, those other home-based or solo bakers, and see where their pricing starts. Do you look at their prices and think “Wow, that’s astronomical”? Do you think “They should really charge more”? Compare your handiwork to theirs — how do your decorating skills match up? What kinds of ingredients are they working with? Who does their target market appear to be? Doing your local research can help you establish a ballpark estimate for your pricing, but you should go further than that. Keep reading to determine how to price your custom cookies.
Cookieconomics: Pricing Calculations
Part of what makes a cookie pricing calculation so difficult is all of the possible components. These can include: time, craftsmanship, ingredients, quantity, delivery method, and margin.
When you’re deciding on your price, start with the value you put on your own time. If you’re just starting out, maybe you can only foresee making $12-15 per hour. If you’re going on year ten of your special cookies, it might be time for a raise. Figure in the cost of shopping for ingredients, preparing, baking, and/or decorating your cookies to find a suitable hourly rate.
From there, ask, are you selling by the dozen? Half-dozen? Is it your grandmother’s secret recipe? Is there an extra kick of flavor that your competition doesn’t have? Do you deliver? Has Mark vetted them yet? (If you didn’t know, our CEO Mark tries as many of our owners’ cookies as he can and reports on them here.)
To help you out as you’re getting started, we investigated the selling prices of thousands of cookie products on our Castiron sites, broken down by cookie type and region.
Priced to Perfection: Real Cookie Prices by Region
The average selling price for the cookies on Castiron was $49.80 (note: there are other cookies priced higher and lower on the platform, but we only included ones that have actually sold). These are the selling prices, not the listed price (like a "starting at..." price), or final price with taxes, fees, and tips.
Sellers sold their cookies in a number of ways — by the dozen, half dozen, dozens and a half, or two dozen at a time. All these metrics should be taken with several grains of salt and those bundling sizes in mind, but again, should help give some idea for how to price your new products!
Our ‘Other’ region came on top at $57 (that includes Alaska, Hawaii, and our outside-the-U.S. friends), with the West coming in last at a $41 average selling price across all cookies.
Next, we’ll look at the different kinds of cookies. Since there are so many different categories, we broke the cookies into ‘basic’ or ‘custom’ cookies. Basic includes the classic chocolate chip, drop, no-bake, peanut butter, undecorated sugar, etc., while custom are the decorated cookies, like for a birthday, graduation party, or Mother’s Day gift.
As you can see, the Midwest, Northeast, and Southwest take the cake (cookie) for highest average sale prices!
We know that y’all have some serious state pride, so we included the listings for states (and a few provinces) so you can see where your state is represented in the standings.
Ready, Set, Raise Your Prices!
Playing the Price is Right with your cookies can be a stressful endeavor. We are committed to helping you run your business better, faster, and more profitably. Knowing what your fellow food microbusiness owners are doing should help with that!
Need help pricing your products? Check out this Cooking Up Sales session to learn more about pricing mistakes you should avoid at all costs.